Condominium Act (No. 2) of 1990:

Sec. 19 of the Condominium Act effectively prohibits ownership of condominium units by a foreigner unless the foreigner qualifies for foreign ownership as described below.

Alien Business Law:

The Alien Business Law, which regulates foreign investment in Thailand, can have an indirect impact on the ability of foreigners to own land. For example, under the terms of the Alien Business Act of 1999, �land trading� is considered a Schedule One activity and is generally prohibited to foreigners.

Exceptions to the Prohibition

1. Board of Investment (BOI) incentives:

Sec. 27 of the Investment Promotion Act authorizes the Board of Investment (BOI) to grant a foreign owned company permission to own land for the purpose of conducting the promoted activity. The area of the land must be approved by the BOI, which will review the land and proposed construction plans to determine that the land's size is suitable for the promoted activity. The use of the land must be limited to the promoted activity, and if the promoted business is later dissolved the land must be sold within one year of the termination of that business. The BOI exception to the prohibition against foreigners owning land is primarily limited to the ownership of land and factory for a promoted manufacturing activity.

In addition to permitting foreign ownership of land for the purpose of conducting a promoted business, BOI privileges can authorize a foreign owned company to conduct business activities which would otherwise be prohibited under the Alien Business Law. Thus, the indirect impact of the Alien Business Law on foreign land ownership can be reduced under BOI privileges.

2. Condominium Act (No. 2) of 1990 (as amended April 27, 1999)

Sec. 19 of the amended Condominium Act authorizes qualified foreigners to own individual condominium units provided that the total area of foreign-owned units within the condominium project does not exceed 49 percent of the total area of all units within the project. In Bangkok and other municipalities to be designated in ministerial regulations, the 49% limitation does not apply. The following foreigners qualify for condominium unit ownership:

a. Individuals having permanent residence status in Thailand.

b. Individuals who have been permitted to enter Thailand under BOI privileges.

c. Juristic entities registered in Thailand but being classified as "foreign" under the Land Act.

d. Juristic entities, which have been granted investment privileges by the BOI.

e. Individuals or juristic entities, which have brought foreign currency into Thailand for the purpose of purchasing the condominium unit.

Strategies

Despite the broad scope of the prohibition on foreign ownership of land and condominiums in Thailand, and the narrow scope of the exceptions, a variety of tactics can be used to minimize the impact of the prohibitions. These include, for example:

a. Forming joint venture companies with majority Thai ownership but adequate safeguards for the foreign minority interest.

b. Long term leases with rights to renewal.

Proposed Changes

Recently there have been many proposals trying to liberalize land ownership by foreigners, and indeed in April 1999, after several years of rumors the rules on foreign ownership of condos were liberalized. Often the proposals are reported as having already taken effect long before they actually become law or official policy. A foreigner who is considering acquiring an interest in land in Thailand should check carefully the current status of laws and policies before taking action.